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Information Technology Strategy Team

How is the Public Service Managing Large IT Projects?

2020-04-21 - Written by My Thuy Pham-Vo on behalf of the"IT Strategy Team"

Last modified: 2020-05-27

In a previous blog post, we highlighted that large changes and investments are increasing risks. Even if many kinds of research have informed the success of small projects are higher than large projects, many government departments and agencies still decide to proceed to implement large IT projects. The Canadian Digital Service (CDS) analyzed the 2016 data and 2019 data of IT projects in response of the ongoing and planned IT project over $1M where 87% of 94 are behind schedule and 56% of 97 are overbudget. Today, let’s have a look at the history of large IT projects in the GC and how the Government of Canada adapt to overcome the challenges. As the Government of Canada works to improve its use of information technology during its transition towards digital, we have reviewed 6 reports from the Office of the Audit General of Canada(OAG). dated post 2003 on IT projects undertaken.

Adapting to Priorities

Looking back at the 2006 Audit Report, the Office of the Audit General of Canada (OAG) has assessed a sample of IT projects provided by the Treasury Board Secretariat (TBS). The issues raised in the previous audits were inadequate analysis of underlying business issues and support from senior executives and project ownership. OAG highlights for all IT projects to support business transformation and operational needs. All project submissions must also consider IT components. The subsequent OAG reports highlights the same challenges as the 2006 OAG Audit Report in delivering large IT projects. First, the attention and support of senior management must improve internal reviews of IT projects, including the evaluation and analysis of key decision documents. Nearly all the reports acknowledge the need to strengthen the project governance and accountability. The reports also state that projects were approved even if the proposals did not meet the prerequisite requirements. OAG recommends to improve the mechanism and find the best practice to maximize the capabilities and commitments for the overall direction of the projects.

The condition of the IT systems and infrastructure, “Aging technology”, draws attention in the 2010 Spring report. Aging IT Systems like the Personal Income Tax and Benefits Return administration system and the Employment Insurance program was noticed in the Chief Information Officer Branch (CIOB) of all the departments and agencies but did not have any strategic directions. OAG highly recommends all organizations to develop a strategic approach in the IT investments and risk management to address the significant actions in the health of the IT systems. This Spring Auditor General Report leads to formalizing the approach to Application Portfolio Management (APM) across the federal departments and the creation of a TBS requirement for departments to report on health of their critical infrastructure.

The IT investments have been a serious obstacle in the assessment for all departments, whether it’s the IT projects to improve old Age systems or a new initiative to improve the operational efficiency and the strategic objectives of the departments. The business case needs to be enhanced as it is described as “a detailed investment proposal that provides an analysis of all the costs, benefits and risks associated with a proposed investment and offers reasonable alternatives.” The IT investment plan should strengthen the alignments with the management practices to help organizations manage and meet the strategic corporate objectives.

Addressing the List of Recommendations

The first project management guideline, Enhanced Management Framework (EMF) supported by Enhanced Framework for the Management of Information Technology Projects – Part II, was created in 1998 to enhance the governance and the support of implementing large projects as stated in the Audit Report 2006.

To ensure the IT projects adapt to the business and operational needs, OAG provided a sequence of recommendations following the assessment of the Management of Information Technology in 2006. Treasury Board Secretariat (TBS) introduced a new Project Management Framework, Policy on the Management of Framework of Assets and Acquired Services. The Framework addressed policies and standards to effectively manage IT projects for the following requirements: governance, business cases, organizational capacity, and project risk management.

TBS included Policy on Investment Planning in the Framework to improve the management oversight of investment of IT projects and consider the policies and standards. Departments will have to demonstrate a minimum five-year investment plan upon submission and require an update every two years. The policy was then replaced with the Policy on the Planning and Management of Investments on October 19, 2019. The Canada Revenue Agency also created a multi-year strategic investment plan and the Resources and Investment Management Committee (RIMC) to improve the monitoring of all projects and provide recommendations to the Agency Management Committee.

The support and analysis of the IT projects status enhanced using the IT-enabled Project Portfolio Status Report. The monitoring and reporting report is required on a semi-annual basis and also reviewed by the ADM Executive Project Oversight Committee. Departments also have other initiatives. For instance, the Canadian Border Security Agency has enabled in the 2013 Project Portfolio Management Framework to improve their performance in Agency priorities, investment plan, risk profile, and Government of Canada priorities. TBS was also recommended by the Public Accounts Committee (PAC) to request financial and performance information to all departments and agencies who submit IT projects of over 10$ million.

Other supporting documents included Treasury Board’s Project Management Policy, Project Risk Assessment and Management Guidelines (2006) and Policy on the Management of projects (2009).

In August 2011, Shared Services Canada (SSC) was created to transform the existing IT infrastructure and services to help the 43 departments and agencies deliver services and programs to Canadians. In the 2015 Shared Services Audit Report, SSC presented the seven-year transformation plan “to consolidate, standardize, and modernize the Government of Canada email, data centres, and network services to improve service, enhance security, and generate savings”.

Are Large IT Projects successful

The OAG placed recommendations to improve delivering IT project by strengthening the governance, business cases analysis, project management, and assessment capacity. As a result, projects still experience a deficient governance framework; some departments do not practise the commitments nor address the recommendations placed by the OAG.

From 1994 to 2004, only 29% of projects have succeeded in delivering on time, on budget and include all the required features and functions. In 2006, two of seven sample projects audited have been well managed. Since 1997, there has been limited progress in IT projects. The recommendations and guidance are not being followed, such as full analysis of the original criteria dated in 2006 in 2011.

The Business Case evaluates the objective, unbiased, and verifiable information (costs, benefits, and risks) as well as the compliance expected to meet the business needs in the projects. In 2006, the report stated the business case details of IT projects were incomplete, out of date, or contained unsupported information. The Chief Information Officer Branch at TBS prepared success criteria to approve project submission: a clear business justification, a clear and reasonable scope, a suitable governance framework, and reasonable estimates, decision points, and independent reviews. However, the accuracy and completeness are questioned on the procedure because it is not done formerly. Departments do not exercise their roles and responsibilities to provide complete and clear information in the reports of meeting the expectations and conditions of the projects. The only “structured” review submission was done by emails and orally.

Reporting the status of the large IT transformation projects remains a challenge in the departments. Every report state that details were not clear and sufficient to implement the projects. In the 2006 Audit, OAG was unable to access analysis or evidence of project document review by TBS. TBS is known “to review the risks associated with departmental project proposals.” Due to being denied access to the documents, OAG was unable to fully assess if the practices of the EMF were applied to government policies and guidelines. Even if the department manages to develop a proper framework, it is required to follow the requirements and commitments. For instance, the Canada Border Service Agency (CBSA) submitted a complete and comprehensive Project Portfolio Management Framework but failed to deliver the requirements, which led to more challenges.

Public Service and Procurement identified the aging IT risk in the 40-year-old pay system in 2009. The Government’s Transformative of Pay Administrative Initiative still led to a big failure. The lack of transparency and ignorance were influential factors of the failed launch of Phoenix Pay System. The focus on the project was to meet the deadline and budget. Making a decision based on the two criteria led costing $2.2 billion for the next seven-year period of 2016-2017 to 2022-2023 compared to the $70 million annual savings.

Thus, gathering all the insights in the OAG Audit Reports relating the IT Large projects from 1995 to 2018, departments and agencies have demonstrated limited success in large IT projects. This is also observed by the Standish Group that evaluated only 6.4% of projects above $10M USD were successful, and from the response to the House of Commons questions (that asked federal government departments to report ongoing or planned IT projects over $1M) suggesting such IT Projects were more at risk of schedule delay and overbudgeting They have met more deficiencies in the high-risk projects rather than improvements. They have not shown to be consistent with meeting current and future requirements in all phases of a project. The departments and agencies’ solution seems to be to reduce the scope of the projects and extend the timelines, in an effort to increase the likelihood of success. The governance Framework remains the constant challenge to manage the IT project. The only management key criteria that have progressed in the projects are the organizational capacity and Project Risk Management.

What’s Next

The public service has faced decades of consistent challenges in managing large IT projects. Although the issues were raised, the departments and agencies were unable to adapt to the OAG recommendations. This comes that considering long-term projects is riskier and costly to organizations.

All projects had the right mindset: Introducing an improvement and/or solving a problem. We have explored new initiatives to deliver programs and services to Canadians. Being educated from our past results could be an opportunity, and a time, to try something different to transform our ideas into reality: reducing the size of IT projects to reduce risks associated with IT and enable organizational agility

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